Austan Goolsbee to leave Obama's economic team

WASHINGTON — For the second time in less than a year, the White House is looking for a new head of the Council of Economic Advisers after Austan Goolsbee said late Monday that he's leaving the post to return to academia.

The chairman of the council is arguably the second most important economic job in the executive branch after the Treasury secretary, and Goolsbee's departure was announced just days after a dismal government jobs report and other indications that the recovery is faltering.

A White House aide, requesting anonymity to discuss personnel matters, said that Goolsbee "felt this was an appropriate time to go back" to teaching economics at the University of Chicago. The aide said that Goolsbee, a longtime confidant of President Barack Obama, intended to remain an informal adviser to the president.

For whomever the president selects to succeed Goolsbee, the road will be tough. At best, the economy has hit a rough patch and economists are ratcheting back their forecasters for growth and hiring as a presidential campaign gets under way. And the government in May hit its debt ceiling of $14.3 trillion, and it'll completely run short of money on Aug. 2. Republicans and conservative Democrats are holding up any new borrowing limit until steep spending cuts are agreed to in a deal.

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"I think what he needs is somebody who can do a good job of communicating ... someone who is moderate enough to actually build some kind of coalition that might actually get something done in Congress," said David Wyss, the chief economist for Standard & Poor's in New York. "Traditionally it's been the academic position ... it's usually also someone with some political skills."

Goolsbee's political acumen was less clear than his economic smarts. During the 2008 presidential campaign, he embarrassed Obama when a Canadian newspaper reported that Goolsbee had told Canadian diplomats that anti-trade talk was really just campaign rhetoric.

Soon after coming into office, Obama's economic team predicted that the unemployment rate would max out at 8 percent, only to see it top 10 percent. It's now 9.1 percent. Goolsbee's predecessor, Christina Romer, also returned to academia last summer without conveying much confidence in a sour economy recovering from the worst downturn since the Great Depression.

For Obama, the loss of Goolsbee is also a personal one.

"Since I first ran for the U.S. Senate, Austan has been a close friend and one of my most trusted advisers," Obama said in a statement Monday night. "Over the past several years, he has helped steer our country out of the worst economic crisis since the Great Depression, and although there is still much work ahead, his insights and counsel have helped lead us toward an economy that is growing and creating millions of jobs."

Prior to his appointment to head the council, Goolsbee was staff economist of the President's Economic Recovery Advisory Board and played a lead role in the policies devised to arrest and reverse the steep economic decline the administration inherited in early 2009.

Although he carried a serious title, Goolsbee was best known in Washington for his levity, at times taking a crack at stand-up comedy and appearing as a guest on Comedy Channel shows such as "The Daily Show" with Jon Stewart.

White House aides declined to discuss possible replacements for Goolsbee. In years past, the position was a prominent one. Alan Greenspan held the post before becoming the long-serving chairman of the Federal Reserve. The current Fed chairman, Ben Bernanke, left his job at Princeton University to head the council before President George W. Bush named him to head the Fed.

While the job involves researching the economy and informing the president on developments, it overlaps with the job of head of the National Economic Council, now held by Gene Sperling, who was a Treasury Department official during the Clinton administration and has strong ties to congressional Democrats.